A Column, A Tweet and a Substack

There’s been a fair bit of controversy recently in my corner of the internet. What does my corner mean, you ask? Well, my corner of the internet is where I focus on figuring out how to help people (young folks in particular) learn better. Anything related to this topic is my specific area of interest, and anybody who writes on this topic is my tribe.

And as it so happened, a recent column, a recently deleted tweet and an old Substack coalesced in my mind recently.

The recent column was written by Nitin Pai. The title of the column is “The Misleading Outrage over 18-Hour Work Days“. As always, it is an interesting, thought-provoking read. If the Livemint article is behind a paywall, Nitin has a version up on his own website, available here.

Earlier this month, the chief executive officer (CEO) of Bombay Shaving Company was forced to apologize for advising people in their early twenties to put in 18-hour work days for 4-5 years, and work hard. The social media backlash accusing him of promoting a toxic work culture was so strong that he quit that platform entirely.

https://www.nitinpai.in/2022/09/12/letter-to-a-fresh-graduate

I have not read the original post, and if the person who came up with the post has now deleted his entire profile, let alone the specific post, I suppose digging it up will be quite difficult. If you’ll permit me the indulgence, I won’t go around looking for archives of the post.

Nitin’s next paragraph is where things get truly interesting:

The man would be wrong if he had demanded that his company’s employees work such long hours and judged them solely on that basis. But to the extent that he was counselling young people on the attitude you need to adopt early in your career, he was speaking in your interest.
Remember, all those people on social media stoning the folk devil of the day don’t care about your interests. I think you have a better chance of success heeding his advice than of those who criticized him for what he said. For those of us who started from humble beginnings, hard work is the surest ticket to upward mobility.

https://www.nitinpai.in/2022/09/12/letter-to-a-fresh-graduate

And I’m sure somebody on Twitter will tell me why I’m wrong to agree with these two paragraphs, but… I honestly do not see why what Nitin has said here is even remotely controversial. The attitude that Nitin is speaking about is, in my opinion, indispensable. There’s no alternative to hard work, and you can pick any number you like – 18 a day or 10,000 in total, or any other. But it’s not so much about the number as it is about the attitude – and the attitude is about being willing to put in the work.

And because there is no such thing as a free lunch, putting in the work might mean having to cut some things out of your life.

Now, you might well decide that 18 hours of working is far too much. Or you might decide that you might want to put in 18 hours five days a week. But don’t get hung up on the specific number – put in the hours that you need to put in, and you need to figure out what those hours look like given what you know about yourself and your own life.

That’s it.

And if this is deemed controversial, so be it. This was good advice to me when I started on my career, and this is advice that I give to young folks today.


But there was another line in Nitin’s column that caught my eye.

“Your family and well- wishers would have advised you to sacrifice some of your leisure so that you can improve your life prospects.”

A person I follow on Twitter recently came up with a somewhat similar tweet. He’s since deleted it, and I’m afraid I cannot quote it in its entirety from memory, but here’s what I remember of it:

The tweet advised one to have more serious pursuits/hobbies at a young age. Sports might come later, as might dance, for example. If you’re seeking out leisure, try and develop hobbies of a more serious nature.

Again, let me be very clear. I’m telling you what I remember of the tweet, and I may well be not remembering it entirely accurately. But while in Nitin’s case I found myself in complete agreement with his column, I find myself in slight disagreement with this tweet.

Disagreements are fine! Please feel free to disagree with my post, and please feel free to tell me, whether on social media or by way of commenting on this post, or by email. I hope we can get into a lovely little argument about why we disagree, and figure out for both our selves about what is the correct way to think about this issue. Not, note, who is right and who is wrong between the two of us. But rather, what is the right way to think about it. That is the point of an argument – figuring out what is the correct answer. Not winning it.

I should note over here that this is easy for me to write, but difficult for me to practice. I struggle with it every time I get into an argument, but this is one of those things that is worth the struggle.

But let me now tell you why I disagree with the spirit of the tweet. Because the tweet was telling me what to do to get the best out of life, not how to go about it.

The YouTube channel MKBHD produces some really good videos, as does 3Blue1Brown, and they both work extremely hard at both creating fantastic videos, and also at doing so regularly. You might say that one is frivolous and the other is not, but trust me, both require a lot of extremely hard work.

In my opinion, it is not for me to tell you what you should be doing at any age. That answer can only come from within. The answer (for you) may well be making Instagram reels, or TikTok videos. Or it could be composing a saga in Sanksrit. Or it could be becoming the next best thing in Indian cricket. Or something else altogether.

But once you’ve decided what that something is, Nitin’s point becomes applicable. Boss, you want to be the best at this thing you’ve chosen to do? Start working!


Which brings me to the Substack post. So you should work hard, no matter what you chose to do. But what should you choose to do?

Well, as I said, not my place to tell you – that choice must come from you, and you alone. Not me, not Nitin, not the person who wrote the deleted tweet, not your best friend, not your parents, not your significant other. You, and you alone.

But I’m happy to tell you that I think I can give you advice in this regard. If you’ve chosen to do something, do you enjoy the process of working at it? Do you enjoy the hours you’re going to have to spend on working at it, day in and day out? Do you, in fact, enjoy this so much that this – the journey – ends up becoming its own reward? So much so, in fact, that the outcome doesn’t matter that much in comparison?

If yes, then congratulations, for now you’re not working 18 hours a day. For it’s no longer work, is it? It is something that you truly enjoy doing for its own sake. And a positive outcome, however defined (a prize, first place in class, a great career, awesome pay packages) is a bonus, but not the point. The point is the process.

So, your motivation should not be primarily based on the goal/outcome/results. Success is best achieved by those who find motivation in the process, rather than the outcome.

https://futureiq.substack.com/p/karmanyevaadhikaraste-in-modern-life

So what should you do in life? You know best! But don’t choose to do something for the sake of the expected outcome, choose to do something in which you enjoy the process.

“For example”, I hear you ask? Well, I enjoy the process of trying to write (and then post) everyday. Do I manage to do so every single day? Alas, no. Life sometimes gets in the way. But do I enjoy the process of reading stuff, and asking myself if what I’ve read will help me help young folks learn better, and then writing about it?

I love it. I adore it, I am besotted with it, and I never want to stop.

Try it. And by it, I mean optimizing for the enjoyment of the process, rather than the potential outcome.

And if it clicks, I envy you the happiness you’re about to feel. 🙂

Audiobook Bleg

In general, I prefer reading content rather than listening to it.

I read much faster, for one. And while it is certainly true that I can listen at 2x, it still is faster in my case to read. Plus, no matter how hard I try, listening at 2x doesn’t seem like a – for lack of a better word – nice experience. I know I should be defining this better than simply saying “not nice”, but that’s the best I can do for the moment.

There are exceptions, of course. If it’s an Amit Varma podcast, 2x is an imperative (although I do know folks who listen at 1x). And given the quality of each episode, and given the fact that transcripts aren’t yet available, the opportunity costs are worth it. But in general? Reading trumps listening.


But even in the case of Amit’s podcast, my preferred location for playing it is in my car. I get far too easily distracted during walks – could be a chain of thought that develops because of something that was said on the podcast, could be a dog that walks past me, or it could be a nice little bout of daydreaming. Shouldn’t be happening, and I ought to be worried about my attention span, but now what to do?

In a car, though, it is a different story. The hassle of trying to drive a car through the dynamic jigsaw puzzle that is Pune’s traffic is the perfect semi-distracted environment in which I just have enough attention to give to the podcast and nothing else.

But audiobooks? Never been able to consume them. I’ve tried with a couple, but rarely gone past the first two chapters. I did listen, with my daughter, to a couple of Harry Potter novels during the lockdown (Stephen Fry was a major reason why), but that apart, I haven’t had much luck.

Recently though, David Perell recommended a book called “The Goal”, and specifically recommended the audiobook. I’ve been listening to it, and it has been a very enjoyable listen. I’m about halfway through, and in this case, definitely plan to finish it.

  1. It’s got a lot of dialogues, and the audiobook does a nice job of making them seem very stylistic and entertaining.
  2. The rhythm of the conversations sounds much better when you’re listening to it, and because the book doesn’t contain a lot of dry descriptive sentences, the format really works.
  3. Each chapter is fairly short – about ten minutes or so, and these bite sized chunks work for me when listening.
  4. There is also some background music that plays at the start and during the chapter, and that enriches the experience of listening, at least for me.
  5. The concepts that are being spoken about in the book are directly related to economics, and the treatment is novel enough for me to remain interested.
  6. The fact that these concepts are interwoven with at least two different stories involving the protagonist make for an interesting tale, and that acts as a lovely bonus. It’s a hook that has kept me interested so far.

All of which was to explain to you why I like this particular audiobook – and to explain why I’m more than willing to try some other audiobook content once this one is done.


So: here’s the bleg.

What audiobooks do you think I might like?

Please do let me know, whether in the comments or however else you like.

Which Textbooks Are We Recommending Our Students Read?

I chanced upon this excellent website via Marginal Revolution yesterday.

What is Open Syllabus?

Open Syllabus is a non-profit research organization that collects and analyzes millions of syllabi to support novel teaching and learning applications.  Open Syllabus helps instructors develop classes, libraries manage collections, and presses develop books.  It supports students and lifelong learners in their exploration of topics and fields.  It creates incentives for faculty to improve teaching materials and to use open licenses.  It supports work on aligning higher education with job market needs and on making student mobility easier.  It also challenges faculty and universities to work together to steward this important data resource.
Open Syllabus currently has a corpus of nine million English-language syllabi from 140 countries.  It uses machine learning and other techniques to extract citations, dates, fields, and other metadata from these documents.  The resulting data is made freely available via the Syllabus Explorer and for academic research. 
The project was founded at The American Assembly, a public policy institute associated with Columbia University. It has been independent since 2019.

https://blog.opensyllabus.org/about-the-open-syllabus-project/

Tyler Cowen linked to a Davis Kedrosky thread about the most cited papers, and the thread is well worth your time. Here are the top five papers assigned as readings in economics since 1990, worldwide:

https://twitter.com/dkedrosky/status/1566617470122635266

But I dug around on the website to see what textbooks have been recommended. And worldwide, this is what comes up:

https://opensyllabus.org/result/field?id=Economics

If you’re wondering, The Wealth of Nations comes in at number 13, and the General Theory comes in 22. I don’t intend this as snark or criticism, and I would in fact argue that the General Theory is not the best book to read if you’re starting on a study of macroeconomics – but that’s a topic for another blogpost. The top 5 is actually a pretty good list, although my personal preference would be to have it reversed. That is, a book on the principles of economics ought to be number one, in my opinion. Should it be N. Gregory Mankiw or some other book? Some other book(s) if you ask me, but that too will be a topic for another blogpost!

Take a look, however, at India’s most recommended textbooks (you can filter by country):

https://opensyllabus.org/result/country-field?id_country=IN&id_field=Economics

And personally, I find it worrying that a Principles text doesn’t make the top 5, and neither does an introductory text on micro or macro! Modern Microeconomics by Koutsoyiannis makes an appearance at number 7 and the first macro text is Shapiro, in at number 10.

I have nothing against any of the textbooks mentioned in this list, and I have (genuinely) fond memories of doing battle with all of them when I was a student, but I do ask myself if these five ought to be the most assigned texts for Indian students.

Which, of course, begs the obvious question, and that will be tomorrow’s blogpost. But for now, a request: if you are (or have been) a student of economics in an Indian university, what would your top 5 list look like? Much more importantly, if you are a professor of economics in India, what would your top 5 look like?

If you can spare the time, I would love to know!

Top Gear and The Division of Labor

You may or may not agree, but I think Top Gear to be one of the best television shows ever produced. Yes, they were politically incorrect more often than not, yes they were occasionally outrageous and yes they courted controversy. But also, the show was of extremely high production quality and if nothing else, it made for excellent entertainment.

Phull paisa vasool, as they say.


But hey, Jeremy Clarkson, Richard Hammond and James May can also help us understand the importance of the division of labor.

What is the division of labor?

Here is the opening paragraph from an essay on the topic over on EconLib:

Division of labor combines specialization and the partition of a complex production task into several, or many, sub-tasks. Its importance in economics lies in the fact that a given number of workers can produce far more output using division of labor compared to the same number of workers each working alone. Interestingly, this is true even if those working alone are expert artisans. The production increase has several causes. According to Adam Smith, these include increased dexterity from learning, innovations in tool design and use as the steps are defined more clearly, and savings in wasted motion changing from one task to another.

https://www.econlib.org/library/Enc/DivisionofLabor.html

Two questions at play here, really. First, what is division of labor? It is “the specialization and the partition of a complex production task into several sub-tasks”. Second, what is the benefit to society of this concept? It is “the fact that a given number of workers can produce far more output using division of labor compared to the same number of workers each working alone.”

And over millennia, this division of labor has resulted in humans building ever more complex things in ever more affluent societies. This process has, of course, rapidly accelerated over the last two hundred years or so. But precisely because we have gotten so very good at division of labor, we have experienced yet another benefit of this concept:

The reason is that division of labor produces a cost advantage where none existed before—an advantage based simply on specialization. Consequently, even in a world without comparative advantage, division of labor would create incentives for specialization and exchange.

https://www.econlib.org/library/Enc/DivisionofLabor.html

This, to me, is an underrated point, and worthy of elaboration. Division of labor is (partly) specializing in a particular task, but the magical bit is that division of labor itself creates incentives for further specialization. Or, to put it another way, division of labor begets more division of labor, and more specialization.

And one indication of this, to me, is the fact that we’ve created a society in which we tell three middle-aged British gentlemen that they can spend about three decades and counting on creating ridiculous, over-the-top television shows that will entertain and enrage in equal measure. This – climbing dams in a car, dropping a car from the sky, taping a car on top of another car and playing football with cars, among other mad things – is what they should specialize in.

Not only will we lap it up, but we’ll pay for knock-offs, spin-offs and versions in different countries. This is going to sound faintly ridiculous, but imagine the three of them trying to pull this off in a hunter-gatherer society. Not a show about cars, of course, but a proposal that the rest of the tribe should get on with the business of hunting down food or foraging for it, while the three of them entertain the others with mad-cap capers. I suspect it wouldn’t have gone down well.

But today, we have enough of a surplus from other parts of society for us to be able to say that hey, a section of our 7 billion plus tribe should drop cars from the sky, and record it so that the rest of us can watch it and be entertained.


Which brings me back to another topic of discussion: perhaps you are of the opinion that surely this is not what we created our modern civilization for. All the efforts of the past thousands of year culminate in… “this?“, you might quite reasonably ask.

Well, this and the Laser Interferometer Gravitational-Wave Observatory. Specialization has resulted in us building tunnels over four kilometers in length so that we can detect gravitational waves that originated 1.3 billion light years away also.

Go back to the question embedded in the first sentence of this section: what did we create our modern civilization for? The question is “what”, not “how”. Economics doesn’t tell you what you should be optimizing for, that’s your business.

But if you have decided that what you should be optimizing for is having cars fall out of the sky, then economics can tell you how to go about getting this to happen. Economics will help you align the incentives, set the prices, deal with the unintended (is that the word I’m looking for?) consequences, and execute the trades necessary for the show (or the laboratory) to come to fruition, and stay popular.


But every time I watch an episode from Top Gear, I can’t help but wonder at how far we’ve come. You might wonder if the direction in which we’ve come is the right one, but you can’t help but marvel at the distance civilization has traveled.

What a time to be alive.

Scott Galloway on Government Spends on R&D

Srinjoy Bhattacharya, a regular reader of EFE, sent along a recent post by Scott Galloway:

What’s the most successful venture capital firm in history? Kleiner Perkins and Sequoia Capital backed many Internet-era success stories. Andreessen Horowitz? No, one organization towers above. This firm was there before the first transistor was printed, and it will be there after we receive brain implants. One investor funded the computer, the internet, speech recognition, last-mile distribution, mapping the human genome, the core technologies of fracking, and the first horizontal shale drill, and today it’s driving down the cost of solar and wind power below that of coal. Even better news: If you’re a U.S. taxpayer, you’re a limited partner.

https://www.profgalloway.com/welfare-queens/

I have covered this topic before, about government spending on R&D, here and here. If you are curious about how countries can go about fostering an ecosystem geared towards better outcomes in terms of research and development, please do read these posts, and much, much more. More importantly, please click on the links in those posts, and read more!

Scott’s article is written in defense of the idea that government spending matters for development of the R&D ecosystem, and I have more than some sympathy for that view, especially in the Indian context. But I’m going to take a contrarian stance in today’s blogpost and ask how Scott (and I!) might be wrong about there needing to be a bigger role for government in this area.

This blogpost isn’t a “gotcha” post about trying to prove specific points in his post or mine as being wrong. It is, instead, a way to try and understand for myself how arguments I am sympathetic towards might be wrong. And that is the meta lesson in today’s post: if you find yourself in strong agreement with something while you’re reading/listening to it, force yourself to disagree. Ask how you might be wrong. Remember, certitude is the enemy, and doubt is your friend!


  1. Be cognizant, always, of opportunity costs. What is the opportunity cost of having government spend on R&D?
    1. Will the government spend the money as efficiently as possible? How will the government define efficiency differently from the private sector?
    2. What are the incentives of the private sector in this regard, and what are the incentives of the public sector? Which incentives, in both cases, might exist but are not publicly acknowledged?
    3. Will bureaucratization be a problem when it comes to government spending? Will this problem be more in government relative to the private sector? Will the answer remain true throughout, or will the relationship change over time? If it will change, according to you, on what grounds?
  2. Is investing in public universities the best way to generate higher long-run returns? Note that the answer may well be yes, especially in the case of the USA, but I would argue that the question should be asked, and on an ongoing basis. If not in public universities, where else? Should government be spending money on rethinking what universities do and how?
  3. An additional point on bureaucratization: might some entrepreneurs be turned off by the pace of bureaucracy and the extent of paperwork? Might government agencies end up playing it too safe relative to the private sector? If yes, how might this problem be solved?
  4. Might the fear of a public backlash in the case of a failure prevent more investments being made in that area again (Solyndra is a classic example, but there are others too)? If so, how do we solve this problem?
  5. At what stage should governments think of getting out of investments in R&D? The answer may well be never, and that’s fine, but the question should be asked. If the answer is not never, how does government exit? How should government exit?

Again, I believe there is absolutely a role to play for governments when it comes to R&D expenditure, and at least in India’s case, I think it to be urgently required. I therefore agree with much of Scott’s post. But precisely because I find myself in agreement, I tried to take the other side of the debate.

But that contrarian stance aside, let me once again reiterate the urgency for more R&D expenditure on India’s part, with a large role for government for the foreseeable future. We have a neighbor that necessitates this, and said neighbor has been a little too good at government expenditures in R&D. We need to catch up – but we also need to (always) question our premises.

Balaji S on The New Search Engines

Today’s Twitter Story will require a little more clicking through in the diverse Twitter threads that are linked to. I found this one interesting, for example:

In other words, assuming I understand him correctly, synthesis engines search for you, and synthesize for you. It’s not just the mechanical trawling of the many alleys of the internet, it is also the packaging together of the results of the search.

I think elicit.org (covered earlier) is a good example, but I’m happy to be corrected if I’m wrong.

It’s not just a bicycle for the mind anymore, it’s the bicycle and the mind.

A Shared Plate at Bedekar’s

My first assignment in the Principles course at the Gokhale Institute is essentially Robert Frank’s famous assignment (pp. 61 in this PDF). Submissions are due on the 5th of September, and I look forward to reading them.

In today’s blogpost, I am going to try and write one of these myself! Three reasons for doing so:

  1. Skin in the game, practice what you preach, only ask others to do something if you’ve done it yourself.
  2. Some students might find an example essay useful
  3. It will be fun!

The essay is below the fold.


One of my favorite places to eat in Pune is Bedekar Misal. The place has been around forever, and the quality of the food has remained consistently good. If you haven’t yet been there, consider trying it!

The last time I was there, though, I noticed something interesting. The menu is printed on two flex sheets that have been put up at both ends of the premises. And the menu says that a regular plate of misal costs 90 rupees. If, however, two people choose to share one misal, then the price goes up to 130 rupees.

Why should this be so?

The costs of production don’t change depending on how many people eat a plate of misal. Neither do the costs associated with serving a plate go up depending upon how many people share a plate. Why then should the owners be charging a higher price for a shared plate?

Because what is scarce, and therefore at a premium, is a place to sit within the cramped confines of the restaurant. Try visiting the place at around one pm, and you’ll see a queue of hungry but patient would-be patrons waiting outside.

Now, if two people occupy a table but have only one plate of misal, that is revenue foregone for the restaurant. If two strangers were sitting at the same table, that would be revenue worth two plates of misal. Even if they knew each other and ended up having one plate each, that would still count as revenue worth two plates. But if they share a misal, well, that’s a loss.

And so what Bedekar Misal does is it puts up a negative incentive in place. Sure, they say, you can have one misal between two people. But you must then pay more. In effect, you are getting half a plate of misal for 65 rupees. At the margin, there will hopefully be folks who will consider this deal and reach the conclusion that paying just 25 rupees more is worth it. If they do, Bedekar Misal gets revenue worth two plates.

And if people choose to walk away from the restaurant rather than pay more for the same plate, well, it still works out just fine for Bedekar Misal. Why? Because there is no shortage of hungry people waiting in line!

So the problem of scarcity of space is solved by not explicitly charging for renting a seat. It is solved, instead, by increasing the price of the good you consume while occupying the scarce resource. That lowers the demand for a shared plate, and therefore increases the number of customers paying full price, while occupying space.

And that’s why this rather odd policy makes sense, once you apply simple principles of economics. Incentives, as it turns out, do matter.

I ended up having two plates all by myself, for the record, but alas, Bedekar’s doesn’t yet offer bulk discounts.


This essay clocks in at 484 words, well within my strictly enforced limit of five hundred words. To everybody reading this, an invitation – and especially to my students: feel free to tell me how the essay could be better! In effect, grade my submission, because I will soon be returning the favor 🙂

P.S. There are some folks who don’t like misal, but that’s fine. Nobody’s perfect.

Argue, Why Don’t You?

We had an excellent class recently (my students and I) on how to define markets.

That’s a whole other blogpost in itself, and I have a friend to thank for helping me discover that the legal world’s definition of markets is very different from the one that economics textbooks supply us with (if at all they do so in the first place).

But the students and I had a lot of fun talking about how to define a market, and at one point of time, the class turned into a very passionate debate about a particular case. The debate lasted for about an hour, a lot of fun was had, and all was well with the world.


After the class, one of the students came up to me to apologize. They wanted to apologize because they had argued with me, and had ended up debating about an issue.

Which, as you might guess, was just too horrible a thought for me to contemplate. What a world to live in – one in which we have a culture where students come up to apologize for having debated an issue in class.

I’d much rather live in a world where students come up to apologize for not having participated in a debate in class – that ought to be the default, dammit. A student who has the enthusiasm, the passion, the willingness and the desire to go up against the prof in a spirited debate, dishing out as good as they get is a great example of an awesome participant in a class discussion! Why apologize for it – that’s your job as a student!

And the reason this needs to be said is because if you are a student reading this, you need to know that arguing in class is A Very, Very Good Thing.

And you don’t have to take my word for it: listen to Adam Grant make the point very persuasively.

  1. Argue as much as possible in class, but always respectfully.
  2. Disagreement is fine (it’s great!), disrespect is not.
  3. That cuts both ways – it is equally fine for the prof to disagree with you, but always respectfully.
  4. Don’t argue to prove that you are right, argue to learn the truth. (Adam makes the same point early on in that podcast)
  5. I don’t always succeed at this, and I probably fail more often than I succeed.
  6. But I work at this, and try and get better at it, and I invite you to do the same.
  7. Arguing with somebody forces you to make your arguments and line of thinking clearer, and that alone is worth the debate. Ditto for writing.
  8. Adam makes the point that growing up in a household where your parents are arguing respectfully is good for you, and I’m happy to report that my wife and I have unknowingly been great parents in this regard.
  9. Adam has a great line in the podcast: the pen might not be mightier than the sword, but it lasts for longer. Whatay.

But bottom-line: please, pretty please. Argue more!

Opt-In, Opt-Out

I ended up paying somebody else’s electricity bill by mistake, and therein lies a tale.

About three weeks ago or so, an alert popped up on my phone. It was a notification from the Cred app. Or it may be that I saw this notification while doing something else on the Cred app. But whether it was a notification on my phone or within the Cred app, the call to action was clear. Two days left to pay your electricity bill, it said, inviting me to go ahead and pay.

Now, I usually pay the electricity bill by using either Amazon Pay or Google Pay, but I had no aversion to paying it via the Cred app. I already pay my credit card bills using the app, so why not electricity bills too? The amount that I had to pay looked right (based on what I remembered from the bill that the utility had sent me), and so I went ahead and paid.

And that was that, I thought.


Except we received, some days ago, the next month’s bill. And this latest bill said that we had to pay a whopper of an amount. Upon going through the fine print, we realized it was a whopper because I had not paid last months’ bill.

Except, of course, I had!

And so I dug through Cred’s sections, hunting down the notification re: I having paid the bill. And sure enough, there it was… except, on closer perusal, for one crucial fact. The consumer number wasn’t correct.

So what had happened?

I still get notifications in my inbox for electricity bills from the last apartment I used to stay in. We shifted out of that place in 2016, but I continue to get electricity bills for that apartment. And Cred, for some reason, decided for me that this was an electricity bill I needed to pay. And told me to pay it. And I went ahead and paid for it.


What is Cred? It is a start-up through which you can pay your credit card bills. There is a lot more going on there, but that is (maybe) a story for another blogpost. For now, it is an app that helps you pay your credit card bills, and that is good enough for us.

How do you go about adding your credit cards on the app? Well, you enter the number, you enter an OTP that you get on your phone, you jump through a couple of other hoops, and then you’re set. You get bill alerts, payment due day alerts, and there’s some gamification after you’ve made payment via the Cred app.

But the most important thing is that you have to opt-in when it comes to adding your credit card. It is not added in by default, you have to choose to add your credit card.

But the electricity bill? Ah, that was opt-out. I wasn’t asked to confirm if this was my bill. I’m sure I must have pressed yes at some point of time to a question along the lines of “Can we trawl through your inbox to identify bills you need to pay”, and I’m well aware of the fact that I was a lazy chump to do so. This blogpost is not me complaining about Cred, or saying something illegal happened.


But it certainly is about choice architecture. Having trawled through my inbox, and having surfaced an electricity bill, I sure do wish that Cred had added an additional verification step. If the name on the bill doesn’t match my name on Cred, maybe ask if this bill is mine? Or even if it does, still check if I should be paying this bill (maybe I’ve rented out that flat, and my tenant should be paying it, for example?).

And only post this confirmation should you be sending me a message to pay “my” electricity bill?

This is, of course, a well known problem in behavioral economics. See here, for example. Or open up the Zomato app! Just before you make payment, take a look at the fact that you’re paying INR 4 to the Feeding India Foundation – this is opt-out. That is, Zomato assumes you are willing to pay the 4 rupees, and you have to opt-out of paying it.

And Zomato will not send you cutlery by default – you have to opt-in to have the cutlery be sent to you.


And I do wish that electricity bill payments on Cred were opt-in, not opt-out!

P.S. This is a true story, but is also a useful way to segue into announcing that GIPE is hosting a week-long seminar on behavioral economics. I will be taking a couple of these sessions, and I now have skin in the game when it comes to talking about choice architecture. An ironical thank you is due to Cred, I suppose.

P.P.S I’m in touch with Cred about this, and while I am not asking for a refund, I do hope that they change their choice architecture. I’ll keep you guys updated 🙂

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